On Prices and Pirates

Believe it or not, there is more going on right now than the Halo: Reach Beta. For those of you that are more WASD inclined, you might remember World of Goo’s “Pay What You Want” experiment last October where gamers, easily enough, paid whatever they chose for this award winning title. Consumers paid anywhere from $.01 to $50 for the game, while the average price paid for the game rested around $2.03. Sure, financially the sale might not have been very lucrative, but as a social experiment the data collected is invaluable. With all of this talk of piracy, DRM, torrents and NPD numbers, how are publishers supposed to approach us as consumers? Is there a way to please consumers while simultaneously protecting intellectual property? As far as I can tell Radiohead and World of Goo are the only notable “pay what you want” promotions worth mentioning. We need more examples of consumer trends before sincere conclusions can begin to be formed about consumer tendencies. Lucky for you, my eager-reader, I have found another example of a successful implementation of this strategy. I present to you, Exhibit B: The Humble Indie Bundle.

And for what it’s worth, the rest of this post is free of charge.

Gamasutra’s Kris Graft succinctly summarizes “the ‘Humble Indie Bundle’ initiative, which ends this week, allows consumers to pay what they want for a six-game indie bundle, with the option of giving all proceeds to charity….buyers can choose any amount of money to pay for the pack. They can then choose to donate to Penny Arcade’s Child’s Play charity toy drive, the non-profit digital rights advocacy group Electronic Frontier Foundation or the game developers. Buyers can also decide how they want to split their contributions between the recipients.” Graft offers some additional analysis breaking down the fundraising efforts by platform (Windows, Linux, Mac) as well as a basic financial breakdown of the generosity of gamers; “Contributions to the “Humble Indie Bundle” exploded over the past week, as contributions grew from about $40,000 on May 4 to around $700,000 Monday morning. The total number of contributions grew from about 5,300 to about 82,000, while the average contribution grew from $7.59 to $8.51.”

Since I have the platform to make grandiose statements, I have a few for you to ponder. My theory is that true talent gets rewarded appropriately. Much like the Field of Dreams, if your game is good, it will sell. I know there are plenty of examples of games that deserved to be played by more of us but failed to achieve financial success (Psychonauts and Beyond Good and Evil come to mind). But word of mouth has evolved at an unprecedented rate, even if Psychonauts was only five years ago. Secondly, DRM sucks. The games featured in this “Indie Bundle” are DRM free. Coincidence? I respect a companies right to protect its intellectual property, be it physical or digital but the existing Digital Rights Management methods prevent legitimate consumers from using the product they rightfully own and do not deter those who wish to circumvent protection schemes. So I ask, what’s the point? Finally, gamers are sincere people. Discounting the bunch that will pay as little as possible because they think it is their Mario-given right, the majority of gamers know that goods and services cost money. Even if the price is solely dictated by our own conscience, the numbers show that we are willing to pay for the stuff we want. The key is to make sure these games are worth our time and money and not try to price gouge us with some kind of second rate shovel-ware.

Also, please stop treating gamers like criminals from the beginning and start showing a little respect and you might get some in return. We are, believe it or not, human beings and don’t appreciate being prejudged based on the tendencies of a small portion of gamers. Don’t talk to me about NPD reports reflecting the state of the industry, their numbers are incomplete – omitting digital sales and not including every retailer might provide a decent snapshot of industry trends, but the numbers we see every month are not complete so please do not treat them as an absolute.

I know the solution is not simple. Piracy is a legitimate concern for developers and publishers. Lost revenue impacts more than the bottom line. The effects of lost sales and send shockwaves through companies, impacting jobs and future development plans. I’m not denying that their concerns are real, but the argument is flawed. Last month the Government Accountability Office (GAO) concluded that “difficult, if not impossible, to quantify the economy-wide impacts.” Furthermore, “three commonly cited estimates of U.S. industry losses due to counterfeiting have been sourced to U.S. agencies, but cannot be substantiated or traced back to an underlying data source or methodology.”

I get it, the nature of a business is to make money. If the cost to make a product is X, then that business needs to make at least X to at least break even compared to production costs. Then there’s the matter of paying all of the people responsible, stockholders, taxes, bookies, loansharks, and of course the Mafia. Ok, part of that isn’t true, but I understand the seriousness of piracy’s potential impact on a business model. But if business are approaching consumer behavior with the preconceptions generated by false research then the rest of the equation is worthless.

Piracy is a problem, but it’s not the only problem. The Humble Indie Bundle proved that DRM-free content at a price of the consumer’s choosing, while not perfect is a solid example of proof that we are not the enemy. Give consumers a good reason to buy your content and they will. Approach consumers with the misguided belief that we are all thieves and your business plan will bare no fruit. Ask EA if the backlash from Spore was worth the hassle. Ask Ubisoft PR if their DRM scheme for their PC games keeps them up at night. Surely someone can think of a better way to protect content but not infringe on the rights of their consumers. There has to be a better way to do this, right?